Labor union Unia said on Jan. 18 that the Zurich-based
Swiss National Bank should lock in the franc’s decline against
the single currency by raising the exchange-rate cap to 1.25
from 1.20 to protect jobs. Unia said the SNB should set a goal
of weakening the franc to 1.40 per euro.

“The floor that we set in September 2011 represents an
extraordinary response to an extraordinary situation, notably a
sense of fear related to the crisis in the euro zone propelling
the franc to unacceptable levels,” Danthine was quoted as
saying by Tribune de Geneve and 24 Heures in a joint interview
published today. “Today, that tension seems to be easing.”

Danthine said the franc is still too strong, responding to
a question whether the ceiling should be adjusted to 1.25 to
bolster exports and tourism. Still, “the policy wasn’t meant to
allow a fine-tuning of the cap’s level,” he added.

The SNB introduced the franc’s 1.20 ceiling on Sept. 6,
2011, after the currency’s surge to near parity with the euro
sparked deflation threats. While the franc breached the cap
once, falling import costs have continued to weigh on prices.

Pressure on the franc is easing and the currency can freely
move above the 1.20 ceiling, Danthine said. It has traded near
the cap until this month, when greater confidence that the 15-nation euro region will manage to overcome the sovereign-debt
crisis pushed it to around 1.25. The franc was trading at 1.2420
per euro at 2:32 p.m. in Zurich.

Danthine also said the currency risk to the SNB’s reserves,
which amounted to 427 billion francs ($459 billion) at the end
of December, is easing. He declined to comment when asked
whether the central bank has been selling euros.